CITIC Limited (267) Earnings Call Transcript & Summary

Good afternoon all of the guests. Welcome all of you to attend the 2023 Annual Results Investor Briefing of CITIC Limited. [Operator Instructions] The briefing will be in Mandarin, with a simultaneous interpreting in English and Cantonese. English is on channel 2, and Cantonese is on channel 1. And I would like to introduce you the leaders, who are attending the briefing. They are Mr. Xi Guohua, Chairman of CITIC Limited; Mr. Zhang Wenwu, Vice Chairman and President; Mr. Liu Zhengjun, Executive Director and Vice President; Executive Director and Vice President, Mr. Wang Guoquan; Mr. Xu Zuo, Vice President; Mr. Fang Heying, Vice President; the General Manager of Financial Management Department, Mr. Zhang Xuejun. First of all, I will give the floor to Mr. Zhang Xuejun to brief you on the annual results of CITIC Limited. And after that, we will take all of your questions. Our leaders will answer your questions after the briefing.

Dear investors and analysts, good afternoon. Thank you very much to attend 2023 annual results of CITIC Limited. Now I would like to give you a report on the results of CITIC in 2023. My presentation will be divided into the following: the first one is about the results of our performance. And second is about the performance of different business sectors. So for the overall performance, I would like to give you some keywords of overcoming headwinds to achieve resilient business performance. And first, please look at the results. In 2023, amid weak global economic recovery and intensifying geographical conflicts, economic growth of China was 5.2%. And we also faced with a lot of overcapacity in some industries, weak public sentiment and many lingering risks and hidden dangers. Facing a complex and challenging international and domestic environment, we delivered a solid performance. We see that we recorded revenue of RMB 680.8 billion, an increase of 2.6% year-on-year growth. And we also actively furthered business development, strengthened scientific and technological innovation and opened up overseas market. Despite all those over -- challenges and difficulties, we also achieved a sustainable development in operating income. The recorded net profit is around RMB 105.3 billion and RMB 57.6 billion profit attributable to ordinary shareholders. After excluding a 1-year revaluation gain of RMB 10.3 billion from the consolidation of CITIC Securities in the prior year, the net profit and net attributable to ordinary shareholders is around 10% and 5.4%, respectively. And there is also a brief overview of all of the business that we have done in the past. There are 5 factors and the growth of different sectors compared to that of last year. If you're looking at the financial service joined forces to serve the real economy, and we providing financial support for major strategies, key areas and weak links. And the operating income and profit attributable to ordinary shareholders increased by 0.5% and 5.1%, respectively, year-on-year. And we also have operating income and profit attributable to ordinary shareholders of non-financial segments increased by 4% and 5%, respectively. Among them, the advanced intelligent manufacturing segment accelerated its global capacity expansion, and we also have acquired Tianjin Pipe and Nanjing Iron & Steel. And those added up to our overall income and profit. And we have in-depth integration with Road and Belt Initiatives and regional development strategies. However, due to the impact of new energy vehicles and the downward impact of the real estate industry, the operating income decreased by 3% and 13%, respectively, year-on-year, yet profit contribution of those segments increased year-on-year. We attach great importance to shareholder returns, both the share price and payout ratio increased. And we can see that the share price of CITIC Limited increased about 2% in 2023 and continued to outperform the Hang Seng Index. The market value of listed equity interest increased by 10% over the year, among which the share prices of CITIC Press, CITIC Metal and CITIC Bank increased by 46%, 17% and 14% respectively. And we can also see that the share price also have some increase. It was 0.5 -- 0.515% (sic) [ RMB 0.515 ] in 2023, and the payout ratio increased to 26%. And then let's have a look of business segment. First part is about Comprehensive Financial Services. In 2023, the Comprehensive Financial Services segment achieved a revenue of RMB 268 billion and profit of RMB 50.5 billion, up by 0.5% and 5.1%, respectively. We tried our very best to increase -- continue to optimize the revenue structure and optimize the market segmentation and strengthen fintech to provide tailored comprehensive financial solutions to increase of Comprehensive Financial Services. And for our first subsidiary under CITIC Limited is CITIC Bank. Withstanding the pressure of narrowing NIM, operating performance outperformed the market, achieving operating income of RMB 205.6 billion, down by 2.6% year-on-year, and profit was RMB 67 billion, up by 7 9% year-on-year. And with the continued optimization of funding cost, NIM narrowed less than the market, average by 3%. Deepening the strategy of retail first, the revenue contribution of retail banking increased 2% to 42%. And we also strengthened our risk resilience. CITIC Bank recorded declines in both NPL balance and NPL ratio for 3 consecutive years. And NPL ratio decreased by 0.09% to 1.18%, and NPL balance declined by 0.6% to RMB 64.8 billion compared to the end of 2022. You see that are the achievements we have made. And we also improved the quality and efficiency of services to the real economy. We also maintained double-digit growth in green finance, strategic emerging industries, medium and long-term manufacturing, inclusive finance and agriculture-related sector. And for CITIC Securities, affected by fluctuation of the capital market, we still maintained the first place in the industry, and its income reached RMB 83.7 billion, down by 2.6% year-on-year, and profit was RMB 19.7 billion, down by 7.5%. I would like to say that, that is because the competitiveness of the market is strengthened and that's why our [ overall visibility ] is declined, but still we are ranking the first in the industry. And for the third subsidiary or subordinator of CITIC Limited is CITIC Trust. We would like to say that accelerated business transformation and achieved operating income of RMB 5 billion and profit of RMB 2.6 billion, down by 23% and 13%, respectively. And we continuously optimize the Trust business structure. CITIC Trust vigorously developed its own risk trust service business with the scale of Trust AUM reaching a record high of RMB 2.1 trillion, an increase of 34% over the year. And we also maintained leading positions in the industry. CITIC Trust successfully won bids for risk mitigation trust services from several large institutions, with existing business scale ranking first in the industry. And next is about CITIC-Prudential Life. And the gross premium income was RMB 31.6 billion, up by 1% year-on-year in compliance with the new regulatory requirement of C-ROSS Phase II and integrated written premium transformation; the impact value and total assets reached RMB 38 billion and RMB 236.3 billion, respectively, growing by 4% and 13% from the beginning of 2023. That's why we were saying that we promoted the transition towards high-value products and the capital strengthened the further development of CITIC-Prudential Life. And with all of the efforts we have made that the shareholding structure remains unchanged, and our performance has been strengthened at the same time. Now let's have a look at another sector with the name of Advanced Intelligent Manufacturing. In 2023, the Advanced Intelligent Manufacturing segment achieved revenue of RMB 50.4 billion and profit of RMB 830 million, down by 2.3% and up by 56%, respectively. We have key technologies, and the competitiveness of our products has been increased and upgraded in a large extent -- in a large degree. And for Advanced Intelligent Manufacturing, please have a look at CITIC Dicastal first. Sales of aluminum wheels increased by 10% year-on-year and sales of casting increased by 20% year-on-year, both reaching record high with overseas sales accounting for nearly 50%. We improved the overseas production network, Mexico aluminum wheel project operated at full capacity and Morocco lightweight automotive aluminum casting factory reached designed capacity. And second, we strengthened product technology and research as well as development. CITIC Dicastal independently developed a complete solution of integrated die-casting for all automotive components, which helped to reshape the traditional manufacturing process of automotive vehicles; promote green transformation and built a product life cycle carbon emission management platform. And third is equity financing in progress. The company is currently filing a listing plan for Shanghai Stock Exchange, which will further enhance its capital strength. And the next sector is about CITIC Heavy Industries. It is driven by the sustained and steady growth of its heavy equipment business, operating income and profit increased by 8% and 164%, respectively. We tried our best to strive to break through core technologies. The proportion of R&D investment continued to maintain at above 7%, providing key advanced equipment components for China; many heavy equipments such as large ball mills and hydraulic heavy-duty mechanical arms for the world as well. We also actively pursued greater internationalization as well to boost the business of CITIC Heavy Industries. Now next sector is about Advanced Materials. The Advanced Materials segment achieved revenue of RMB 267 billion in 2023, up by 10% year-on-year. So here, we continue to encourage in the development of overseas copper and iron core [ ore ] resources. And so in this part, we could see we acquired the Tianjin Pipe and also Nanjing Iron & Steel, pushing annual production capacity to 30 million tonnes and improving the product range of bars and also wires and tubes and plates. And so here we could see that the revenue that increased by 16%. And so we need to consider about the total market scenario, and so here, we could see there are 3 parts. The first one that is the sales that increased against the trend, that is CITIC Pacific Special Steel successfully consolidated the Tianjin Pipe. And so here we could see for this part, the seamless steel tubes that reached 5 million tonnes, the leading scale in the world. We seized all development opportunities in wind power, in new energy vehicles and also other industries, and sales volume of the steel in energy and automobiles increased by 56% and 20%, a record high. And so we also undertake that 89 provincial level projects and so here that we also undertook 29 projects about the provincial level, participated in the revision and release of 21 standards. So we also have one of the lighthouse factory. This is the first world-class Factory Lighthouse in special steel industry, and that is the second lighthouse factory of the CITIC Group. And the next one, there is the Sino Iron, and we could see the profit was USD 540 million with an year-on-year grew by 14%. So the production and operation remains stable. So the output of the iron core [ ore ] concentrate has exceeded 20 million wet tonnes of the 5 consecutive years. That is the 90% of them actually sold to China. And so here, we could see for -- we also -- the land restrictions to constrain product capacity. But still, we could see that the output that reduced to 14 million tonnes in 2024. Another one that is the CITIC Metal that it has become the first of group listed company under the A-share registration-based system in April last year. So here, we could see that the revenue was CNY 125 billion, up to -- up by 4.9% year-on-year, profit CNY 2.1 billion, up by 7.1%. And here we could see we have overseas projects, the KK Copper Mine in the Democratic Republic of Congo has been constantly surpassed the production records; and also Las Bambas Copper Mine in Peru achieved a great success; and also Ivanhoe Mine completed a private placement to raise about USD 430 million. And so here, we can see for the nonferrous trade business developed rapidly. The market of the niobium products continued to maintain over 80%. And so you can see the nonferrous metal increased by 31% year-on-year. The next company, CITIC Pacific Energy, that the profit was RMB 1.05 billion, up by 11% year-on-year. So we continue to promote the transformation of the new energy. So actually, we have power -- wind power capacity of 1,000 megawatts being successfully connected to the grid. And here, we could see that for the installed capacity of the new energy increased by 15.14%. The next one is New Consumption. The revenue was CNY 51.4 billion, down by 3%, and the profit was RMB 1 billion and 94%. So here we can see that 5G users in Macau, the book publishing, domestic rice and corn seed market share all increased, and their market actually kept the leading position. And so the motor business focus on accelerating its new energy transformation and reviewing overseas and opportunities. And the CITIC Telecom International, we can see the revenue was HKD 10 billion, so a decrease of 1.2%, profit HKD 1.2 billion, up by 3.4%. So we can see we have -- this company made significant contributions to the Digital Macau. So the number of the 5G users in Macau actually surpassed 500,000, ranked #1 in market share, approximately 75% of the market share. And we also steadily advanced our business expansion. So CITIC Telecom expanded its data center business and also secured a major customer for its Internet services and also high-grade data center in Hong Kong. So enhanced its cloud services and also became the first managed service provider in Hong Kong. And the next one, CITIC Press and so affected by the weak consumption in the book market. So here, we could see that sales was down to 4.7%, and the amount was CNY 1.7 billion, profit declined by 7.7% and down to CNY 120 million. So here, we can see CITIC Press still actually continue to lead mass production markets, even though the sales and profit that actually decreased a little bit. And so here, we could see we ranked #1 in terms of the business, psychology, self-help and biographies. And we also ranked #2 in a market position in terms of children's books and natural science books. So the CITIC Press also actively embraced the tide of scientific and technology revolution. And therefore, it has applied the AIGC in key production process so that you have the better platform. And also Dah Chong Hong. And so here, we could see for this one because of the narrowing of the gross profit of those combustion vehicles. And so here, the revenue was RMB 40.9 billion, profit of RMB 140 million were down 4.4% and 74%, respectively. And here we can see, we continue to actively promote the market development of the motor business and also strengthen the construction of the sales channels of the food business. So we actually acquired the Tsit Wing International and so -- the largest coffee and tea suppliers in Hong Kong. And so we have acquired a 21% equity stake. The next subsidiary company, CITIC Agriculture. So here, we could see that we have increased the sales volume and price of the rice and corn seeds. And so here we can see, we've consolidated leading position in the seed industry. LongPing High-Tech achieved the financial consolidation by the Longping Agriscience, greatly enhanced the industrial status and brand. So here, the hybrid rice and corn seeds increased by 3% and 2.6% to 18% and 9%. It continues improved operating performance significantly. So here we could see there was growth of the operating income by 4%. The next segment, New-Type Urbanization. So here, we could see the revenue was RMB 43.4 billion, down by 13%. Profit was RMB 2.2 billion, up to 17%. So the overall sales of the real estate projects actually went well and the construction business made efforts to promote market development. But prudent provisions made to strengthen asset quality. So -- excluding the impact of the provisions, the operating profit was RMB 6.7 billion, down by 12%. And so here, we could see for the property development, operation and management, with revenue of RMB 10.4 billion, a slight drop of 4.4%. We have very good projects, and for example, that we have the Jade Mansion in Wuxi and also the Harbour City in Wuhan. And these projects actually ranked quite top in terms of the signed contracts. And it also continued to advance risk resolution through the collaborations. And so the 5 risk resolution projects, including Yalong in Shanghai and also Zhongxinli in Shenzhen were implemented. Sales contract of the Hongshuwan project acquired from the Kaisa Group reached 85%. And the Dongjiaotou project has finalized land exchange and allocation plan. And so here, we can see the construction and urban operation, that revenue decreased by 13% and the revenue was RMB 34.5 billion and operating profit dropped by 45%. And so we still make efforts to promote market development and so even though the market is difficult, but we still achieved a newly signed contracts within value of CNY 21.3 billion. And we also involved some highlight projects. For example, Algeria and Lingjing Expressway projects have commenced, and also, we also have the Futian Water Purification Plant in Asia. So that's all my presentation. Thank you.

Thank you very much, and let's start the Q&A section. [Operator Instructions].

I am from the Huatai Securities. My name is [indiscernible]. So my question is for the Chairman, where I have 2 questions. The first question that is on -- congratulations for the achievements that even against a very difficult macro environment last year. But at the [indiscernible] we could see. And so actually, we have -- we are facing some uncertainties. So how do you think about the future development? And the second question is about your team and also the mechanism and because in this year, that actually that CITIC Limited has hired the key top management team and then was -- a very profound background from the major state-owned banks. So why there is such human resources or the organizations changed? And how do you see about the future development of the company? And how will you build up the team to cope with the market changes?

Thank you very much for the question. Last year, last December, I took office as the Chairman of the CITIC Limited. I feel the responsibility, and I would like to thank you for your long-term care and support. I hope that you will continue to care about the reform and development of the CITIC Limited. In the past few years, CITIC Limited has [ observantly ] deepened reform and development. And we made -- implemented the strategy of 553 in steady and orderly manner. So it's a great result. And for the next part that we are going to further promote high-quality development, to build ourselves as the world-class enterprises. And so we have stable development, which laid a solid foundation for us for future progress in 2023 that CITIC Limited has been selected as the top 500 companies in the world. And so we've fulfilled our key targets. And so we have the CNY 10 billion in net profit, and we also received high scores in terms of the Ministry of Finance assessment. So when we reviewed the history of our company, of our group, we could see that CITIC Group is always focused on reform. So we will continue to carry the reform spirit and to make innovations and to continuously to explore the pathway, which is a fit for CITIC Limited. We are seeking new models and new growth points in joint forces. So we will stick to our blueprint. So on the basis of the 553 strategy, we have proposed that the overall reform and development principle after reforming opening up. So that -- we will deeply implement 553 strategy. Our target is to build ourselves as the world-class enterprises. So we will improve our core competitiveness and functions and therefore, we will make adjustments of our development direction and focus of the 5 segments. So we will further clarify the main business of the 5 segments. We will continuously improve the level of the management and operation. We will continue to deepen the business integration, and we will enhance our moves in terms of the mergers and acquisitions. We will strengthen the internal and external collaboration. We will have innovative business models and service models that to give a full play of our advantages. So we will actively focus on the forward-looking strategy emerging industries. And then 3, 3 pushes, that is to push our financial industries that should be better and stronger to further promote transformation and upgrading and also to promote effective risk mitigation. And in terms of the financial side, we will continue to improve the effectiveness of our financial resources. So we will focus on about the 5 parts of the finance. And therefore, the CITIC holdings that we will find a way, that is a fit for Chinese characteristics, to security lending platforms to strengthen and fasten the speed of becoming world-class investment bank. For real economy, we will try our best to keep our pace with the revolution of technology and transformation of industry so that we can have the second round of the growth curve. Last month, we released the integrated solution for press -- and casting and die solution for automobiles. And this is more like a CITIC solution to make breakthroughs for automobile industry, and that is also a brave exploration for CITIC to create a second growth curve. And we would also try our best to control risks and prevent risks from happening. We will depend the establishment of a comprehensive risk control system and try our best to get rid of the risks at the early stage and have mechanisms to track all of the mistakes or malfunction. And fasten the speed of the modernization and intelligentization for risk control as well. For the 5 breakthroughs, they are referring to new breakthroughs in restructuring the organization system, strengthening team building, improving the incentive mechanism, deepening scientific and technological innovation and coordinating overseas development. Therefore, restructuring of organizational system, we will try our best to effectively taking a leading role at the commanding center to allocate all of the resources and have effective evaluation system and to make good work on risk control. We also like to try our best to encourage all of the subsidiaries to have differentiated development path. For team building, we will pay attention to all of the leaders or [indiscernible] to make the best of their advantages and have a whole chain to select and train the best leaders who can do -- who can excel in management. So we also will try best to complete the incentive mechanism. And we will compare all of the resource of our performance within ourselves and the overall contribution of different business sectors and also try to compare our results with that of the whole industry. With all of the evaluations and [ characterizations ], we will have a very close link between the KPI or the working performance with their salary and the total salary, and we'll have a close relationship with the contribution of their working results or performances. When we're talking about the strengthened scientific and technological innovation, we would like to give floor to all of the teams who are doing innovation, and we will establish a scientific innovation commission and scientific technological commission, digitalization commission. Those commissions will have a coordination mechanism to push forward the industrial innovation and the birth of high tech technologies, high-end technologies so that we can make breakthroughs and create a triangle, which -- with technology, finance and industry. This year marks the 45th anniversary of CITIC Limited. We will try our best to implement all of the working spirits and the contents of the working meetings of the 20th National Congress, the financial working meeting from the central government and economic working meeting from the central government. We will try our best to increase our revenues and net profit. At the same time, we will try our best to outperform the market and try to increase the ROE and to maintain the ROE at a reasonable range. We will also try our best to enhance the application of technology and the cost of human resources. For stabilization, I mean, for us, we will try our best to reduce the total amount of NPL debt and the debt ratio. We will also make a debt ratio of assets at a stable level. Right now, the economic recovery of China is quite stable and growing up. I think that background information will not be changed. And that's why I would like to say we have such a trust and belief that we will always make our best and maintain a beneficial growth trend and create better value for our shareholders and investors. As you see that we have another 2 leaders, Mr. [ Zhang Xuejun ] and Madam [indiscernible], which are reflecting the great concern from the central government and the great support of the leadership of CITIC Limited. And today, [ Mr. Zhang Wenwu ] is with us on the stage. And he will also take your questions. Madam [indiscernible] has other business to do. It's such a pity she is not able to be present in today's briefing. But still, we know that comprehensive financial service is our basis, and it accounts for 40% of our benefits and accounts for 80% of our revenue. For Mr. [indiscernible], he is coming from the financial accounting major. And he's also accumulated a lot of experience and Madam [indiscernible], she is major in management and operation. She is also quite very experienced. She had sensitive -- has a very sharp sense of the market, and they used to work for state-owned banks. I'd like to say that they are quite excellent managers and leaders and accumulated long-term experience of financial industry. For CITIC Limited is home to working staff from all across China and also platform for all of us to start business. I strongly believe with their support, our work even can be better and better, and they can make great contribution to the development of our business and also strongly believe that they can bring their excellent working experience to CITIC Limited and improve our management level even to a higher grade. Human resources are the foundation of success and so it is to CITIC. And for CITIC Limited, we attach great importance to teams establishment and the development of working staff. And we will always try our best to faster and cultivate all of the talents with -- who are working for us. And for our next step, we will focus on 5 breakthroughs. Among the breakthroughs, there are 2 are targeting at cultivating of talents. With the new times, new challenges and new opportunities, we need to implement the training of the management new leaders and complement the talent pool. We also need to have [ routinely ] training for all those talents and managers and expand the pool of talent. We try our best to cultivate and welcome all of the talents from across world -- all across the world, and we also like to pass the spirit of CITIC to generation and generation. Within CITIC Limited, we already have public voting and to select those talents within our group and different subsidiaries. They can try their best to compete with each other to take a specific working position. We try our best to be [ brief ] to select those post 90s, who are quite good in doing management. And we also tried our best to improve the evaluation of their performance. And the performance or evaluation of their KPI is differentiated to protect the scientific -- the science of fairness of the evaluation of their working performance. And at the same time, we also would like to streamline and simplify all of the evaluation processes for all of the working staff so that we can encourage all of the initiatives, all of working staff, they can take their own initiative to work. On the other hand, we also tried our best to improve and complete the salary system and try our best to increase their salary and improve the working efficiency of working staff and try to do the evaluation based on their working performance and contribution. We would like to mobilize the limited resources to maximize. Recently, I think you already noticed that CITIC already released a voluntary share purchase information. And that initiative is more like one of the exploration we made to encourage the working steps of motivation to work, and is also an initiative to face with all of the challenges and stabilities of the environment worldwide. In order to establish a world level enterprise, we tried our best to guarantee the talent organization and mechanism of the incentives. That is my answer to your question.

Next question, please.

I come from Citibank. My name is George Choi. And my question is about the market value of state-owned enterprises. As you know that there are more -- there are a lot of contacts between you and the capital enterprises. And I also heard that you will have a voluntary share purchase initiative. I would like to know your dividend mechanism. And is there any new measures for evaluation of the performances of your working staff?

Thank you very much for your question. Just now you're talking about the payout ratio or dividend. I think there are 2 points I'd like to answer you. Point number 1, we always maintain a stable and sustainable payout ratio and mechanism from 2019 to 2022, and that percentage is 25%. And in 2023, it increased to 26%. That surely showcases that we have our own commitment to our shareholders and the investors. At the same time, we also try to maximize the payout ratio and dividend mechanism. As you know, [indiscernible] and CSRC tried their best to enhance the ROI of the investors. And against such a background, we also did study and research. And combined with our own development situation as well as a different background environment and the own reform we're taking within CITIC, we'll like to make a scientific payout strategy for all of the investors and the shareholders. You've asked about market value management, it is very important and is one of the key task for us. It enjoys very high priority in our work. I would like to share with you 3 key words. The first one, that is the strategy planning. We have strategy planning. So since 2021, that we actually developed a 1.0 version of the reform in terms of the market management -- market value management. So we actually raised many reforming actions in terms of the market value category, the net-add category and also the organizational category. And so we have founded the market value management committee and with the Chairman, [indiscernible], as the leader of this committee. And recently, you can see the top management team and also the market value management team that actually have a frequent and sufficient communications with the capital market. And the Chairman himself actually went to the overseas markets such as the Middle East and also Singapore. So we listen to the opinions from the experts and also investors in Capital City. So their inputs are inspirational. And so in the past 2 years that we've already [ rolled ] out the market value management simulated assessment for CITIC Bank, CITIC Securities. And so now we're going to expand such a market value assessment scope. So from the perspective of CITIC Bank, it's a pressure, but of course, also a motivation. And so when we look at the results, the share price of the CITIC Bank continues to grow and also outperformed the market. And so here for CITIC Bank actually is having the #1 position among the market players. And the second keyword, that is supportive. So externally, we could see that Chinese economy development has very obvious systematic institutional and market advantage and also we have advantages in supply chain and also talent. And so we will make with the [ macro ] policies, portfolio. And so since this year, we could see we've already witnessed a very stable development of the Chinese economy. And so we will continue to focus on the resilience. And so internally, we could see there are 3 values of the CITIC -- from the CITIC Limited. And so here, we could see that on the 22 March this year, and so we could see the National Standing Committee actually released a very positive signal to support the development of our real estate. And so in some of the key areas, for example, how to lower the risk of the local debt. And so these are some of our key concerns. And many of these that actually have made improvements. Last year, when I communicated with the analysts, we -- they were concerned about risks. I think those risks actually will have the impact on the revenue of our bank. So that's the situation last year. But we secured the baseline, we didn't let the systematic risk took place -- take place. How about in Real Estate segment? I think there are [indiscernible]. And so these macro environment that will give favorable factors for the development of the CITIC Limited. And for CITIC Limited, we have diversified majors of business, and our performance is stable and the dividend is high. So we can see actually our dividend rate ranged 8.3% to 8.4%. So we maintained a good stability in such changing and fluctuating market. So internally, we could see that these kind of advantages is supporting the growth of the market value of the CITIC Limited. And therefore -- and so here, we could see that with such a stable performance that we are able to have, the price -- have the share continues to increase. And for example, the last year, the Hang Seng Index dropped by 13.82%. But for CITIC Limited, our share still increased. It's quite positive. We believe it is highly relevant to our business. And so now, we reviewed our 1.0 Version of the market value management, and we are now preparing the 2.0 Version of the market value management. So the core content that is to build that incentive mechanism and also to clarify the dividend expectations, and so we also see we will have the market value management assessment. And for example, we could see there is a report that released about the system market. And so here, we can see -- and then we promised that the dividend will not less than CNY 100 million. So I believe that it also will boost the further level of the high-quality development. And last but not least, and now we will focus on about the in 1 principle, 3 pushes and 5 breakthroughs, and so we will continue to increase our market value and also increase earnings to shareholders. And so I believe that there is internal laws of the capital market and the price of our limited -- the share price is [ unlimited ]. We believe that there will be improvement in the future. Next question.

My name is [indiscernible] Securities. And so our new added President, Mr. Zhang Wenwu attended our briefing. So I have 2 questions. And actually, and that first of all, that is the -- on the Central Financial Work Conference and it mentioned that the financial institutions should work on the 5 segments, the fintech, green financial, inclusive financial and also pension finance and also digital finance. So what actions or strategy that will be played by the CITIC, especially CITIC Financial Holdings?

Thank you very much and for the introduction of the Chairman. I have been -- worked at ICBC for many years. ICBC is also [indiscernible] company. And so I often come to Hong Kong for the road shows and also the annual result announcement. So thank you very much for your attention to myself. So back to the CITIC. So CITIC Limited has a comprehensive advantages. It enjoys very good brand reputation and interest. So I'm very honored to take this position. And I would like to work with everyone together to boost the development of the CITIC Limited and CITIC Group. So first, that is the CITIC Financial Holdings and it consistently implements the requirements that released by the Central Financial Work Conference that to work on the 5 parts of the finance sector. So we will improve our functionality and profitability to create more value for the shareholders. In the FinTech, I would like to share with you from 3 aspects. The first one, that is equity. So CITIC that has very good advantage in terms of the equity. And therefore, we actually -- we could see we have nearly 20 equity investment institutions, and we work as alliance that build up the list and also to share our daily monitoring and also to create more value. So in the past 6 months, they were over 20 billion [indiscernible] that were established. And with the total assets under management exceeded JPY 300 billion. And secondly, we also would like to continue to finance for those science and technology enterprises and especially to have the earlier stage investment. So currently, and actually, we've already financed over JPY 400 billion in terms of those high-tech enterprises with a growth rate of 21%, and thirdly, that is provide funds for that specialized in the professional enterprises. And so that investment has been already exceeded 2% of the coverage rate and so improved by 12.4%. So we are able to provide the services with a full license, a full cycle and full scenario. In terms of green finance, that we -- was the CITIC subsidiaries have jointly created a service system and that to provide financing, wealth management, leasing, et cetera. So this is the green finance sector. So CITIC Bank also support the industry of clean energy, energy conservation, carbon reduction and also focus on about wind power, photo tech, new energy vehicles and also the power sales, energy storage, et cetera. So these are the areas that focus by the CITIC Bank. And so in 2023, the green finance fund raised over JPY 459 billion with a growth rate of 37%. And the CITIC Securities and CITIC in China securities also ranked #1 in terms of the green bonds. In terms of inclusive finance at CITIC Bank that has provided long-term mechanism and inclusive finance. And so for the inclusive loans that in last year exceeded 54 billion -- 540 billion last year. And so we focus on about the innovative scenario-based loans on loans and special loans, et cetera. So for example, we have the supply chain finance. And so that means the bank rating credit will extend to the suppliers that upstream and also downstream. And so there are also some special funds for the special industries such as the e-loans and also for small and micro enterprises. And the whole process only takes a few minutes for those enterprises to apply for and get the money. Of course, this is need to be supported by the technologies, and for example, CITIC Bank provided a total JPY 1.5 trillion in supply chain finance for over 38,000 enterprises. And that means the number of the accounts of the serviced enterprises that actually increased by nearly 3.4x. And in terms of the pension finance, we also built out a full license and full lifetime services. And so we will give support to the first, second and third pillars and to increase the scale of the pension and so that the asset under management already surpassed a large number, that is surpassed of JPY 1 trillion. And therefore, in terms of the pension finance that CITIC Limited is going to build the ecosystem, for the pension finance to support those elderly to have a better life in the future. In terms of the digital finance, that we have built a customized AI-based financial services. So in infrastructure, we have the AI foundation model, wealth management. We also have the data share platform, and for this data share platform, we also build up the standards for data sharing and also to connect with the fundamental layers of those data centers. And so we used the Epic management app that should explore the application for digital and AI and applications. To launch [indiscernible] with rapid users base of 12.5 million and immensely active user base of 1.32 million. We are the first to provide customers with a panoramic wealth management service with 1 point of access and comprehensive access. Right now, we developed a [indiscernible] treasury intelligence management system with a total of 1,314 large and medium-sized enterprises online. We would like to say that we are ranking ahead in comparable industries with a total of 27 projects, have won awards in the industry. In the next step at CITIC, financial holding will continue to rely on its comprehensive financial service advantages, improve its plans of the 5 major factors and effectively play a role in serving the real economy and maintaining financial stability. So that we can maintain a good balance between risk control and capital management. In terms of risk management, we achieved joint prevention and control of risk through collaborative management, establish a risk management committee and expert working group mechanism for governance and management and negotiate with the parent company and the subsidiaries to form a clear structure, clear divisional labor and effective operation of the financial management control system. We are following the working principle of one CITIC, one customer to increase risk control efforts in key areas such as real estate and government financing platforms so that we can effectively prevent risks from happening. We will try to optimize the risk warning mechanism to identify warn, expose and dispose of risks in early stage, play a leading role in risk preference, adhere to problem-oriented and result-oriented approaches, so that we can enhance our risk management capabilities especially in major risk projects. And through the integration of finance and industry, we can effectively promote the process of major project insurance, achieve win-win outcomes for all parties. We will also try our best to integrate all kinds of data from different industries so that we can improve their digital risk control capabilities of our partners. In 2023, the main risk indicators continued to improve and the nonperforming assets and nonperforming ratios achieved a double reduction. The risk of real estate has also been disposed by us. Throughout the year, we disposed risky projects by RMB 34.39 billion through collaborative guarantee, reduce the nonperforming assets by RMB 20.8 billion, reduced the nonperforming loan ratio by 0.29 percentage points. At the same time, we also tried our best to narrow increased rate spreads and tight capital balance and tried our best to coordinate, supervise and indicate detailed -- and detail their measures to manage the risks and spread our management philosophy to our subsidiaries. At the same time, we tried our best to allocate all of the assets and tried our best to boost the beneficial assets storage in our subsidiaries. We try our best to have differentiated management platforms and establish platforms for our subsidiaries to operate. And each solve those key and crucial issues with the joint efforts. And we try to reduce the assets, which is very capital consuming. And last year, we saved RMB 21.3 billion of capital. We try to best to have a sufficient supply of capital with such efforts. And those are the efforts we have done to maintain a comprehensive growth of our business last year.